Planning Your Next Chapter: What to Do After You’ve Sold Your Business

February 20, 2019

Soterian

You may have been dreaming about this day for a while. You sold your business for a price that reflects the years of hard work you put into it, and now, sizable check in hand, you’re already contemplating your next chapter.

For many entrepreneurs who sell a successful business, the quest for new ideas or opportunities begins almost immediately. You could afford to spend the future fishing or out on the golf course, but what you really want is to take ownership of something new.

You’re not alone. According to a 2012 study by Coutts, 40% of entrepreneurs who sold their companies went back to work to start up or run another enterprise. Angel investing is another common next step. As an entrepreneur, you’ve never been completely comfortable letting someone else take the reins, which is why you started your own business in the first place. What you really enjoy doing is undertaking initiatives where you bet on yourself.

Start a New Business

You took a good idea, made it great, and have been loving your life ever since. Why not do it over again? Look at an industry you’ve always wanted to explore and take note of anything that seems inefficient or doesn’t properly serve customer or client needs. Pain points and imperfections are all opportunities for new business ideas.

Buy an Existing Business

If you’re more interested in the idea of taking a successful formula and making it even greater, why not buy an existing business? Unlike a franchise, you change things as you see fit. If any aspects of the company’s operations are inefficient or unprofitable, you can change them, and you can implement new ideas without restriction. Many entrepreneurs enjoy taking over undervalued businesses because they know they can improve profitability and relish the challenge.

Buy a Franchise

Franchising can be a great opportunity to collaborate with a large and successful brand. You own and manage the business independently while enjoying access to group advertising and marketing resources and an existing customer base. This opportunity to enhance your management skills within a well-established business model can put you in even better stead if you decide to start your own company again.

Angel Investing

If the sale of your business has left you affluent beyond your wildest dreams, you may want to consider angel investing, or providing capital for a promising start-up in exchange for ownership equity. Depending on the terms of the funding agreement, you can assume a non-executive position in the company while supporting a new entrepreneur with your industry knowledge and business experience.

Use the Power of Opportunity Zones to Juice the Return on All of these Strategies

Whether you are buying a business, starting a business or franchise, and particularly if you are interested in Angel Investing, the Tax Cuts and Jobs Act of 2017 (TCJA) could save you significantly on your taxes. The TCJA created the most significant wealth generation opportunity ever created by a federal tax program by allowing you to defer the payment of taxes on the sale of your business until 2026 for any amount that you invest into a Qualified Opportunity Zone. For more information on opportunity zones, click here.

If you’re not sure yet what you want the next stage in your life to look like, there’s no rush. Take some time off, travel, and think about what inspires you.

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